Firms in Africa report "regulatory
and economic policy uncertainty" as a top constraint to
their growth. This paper argues that often firms in Africa
do not cope with policy rules, rather they face deals:
firm-specific policy actions that can be influenced by firm
actions (such as bribes) and characteristics (such as
political connections). Using Enterprise Survey data, the
paper demonstrates huge variability in reported policy

After more than 35 years, the elected
local government system in Lesotho was reestablished in 2005
through the election of the Local Authorities, i.e. the
Community and District Councils (CCs and DCs). Across the
political spectrum, the political will to move forward was
at its peak. An exemplary campaign to educate the entire
population as to the purposes and functioning of the new
Local Authorities, and the electoral process preceded the

In this issue: making finance work for
Africa; focus on water in the Middle East: how to manage
scarcity; fungibility, and the apos;flypaper effectapos; of
aid; do girls gain from migration-induced male absence? The
distributional effects of World Trade Organization (WTO)
agricultural reforms in rich and poor countries;
clientelism, credibility, and policy choices of young
democracies; and entry regulation as a barrier to entrepreneurship.

This paper examines different models of
governing structure found in metropolitan areas around the
world. It evaluates how well these models achieve the
coordination of service delivery over the entire
metropolitan area as well as the extent to which they result
in the equitable sharing of costs of services. Based on
theory and case studies from numerous cities in developed
and less developed countries, the paper concludes that there

Yemen is the second poorest country in
the Middle East and North Africa region, with 42 percent of
its population counted as poor in 1998. GDP has stagnated at
around US$530 per capita in real terms since 2002.
Unemployment, estimated at 11.5 percent in 1999, is expected
to have worsened as the population has climbed at 3 percent
a year and the labor force has burgeoned. Extreme gender
inequalities persist. Malnutrition is so severe that Yemeni

This note introduces an evolutionary
approach to economic and governance reform. It lays out two
especially prevalent trajectories that differ starkly from
one another in how they prioritize and sequence economic
growth, state building, and the development of civil society
and political institutions. The first trajectory focuses
initially on investments in state capacity. The second
initially prioritizes smaller, more catalytic entry points

This Investment Climate Policy Note
(ICPN) for Sierra Leone evaluates the country's
business environment by: (i) analyzing barriers to private
sector investment and growth and how they vary among
different types of firms; (ii) benchmarking Sierra
Leone's investment climate and firm performance to that
of other countries; and (iii) providing recommendations to
promote and strengthen the private sector. The ICPN is

The study on the sources of rural growth
in Burundi results from a meticulous work carried out by
eminent experts of the World Bank in response to a request
of the Government of Burundi. It describes the global
environment, which explains poverty aggravation and builds
proposals to overcome most binding constraints to growth in
Burundi. This study is an important contribution in the
fight against poverty, as it identifies ways to resume

This paper develops and tests a proposed
methodology that puts forward a new integrated method for
evaluating the performance of development finance
institutions. This methodology applies assessment criteria
that take into account both the social objective that the
development finance institution addresses and the subsidies
it received in order to achieve such an objective. This
methodology is applied to two pilot case studies-Banadesa

The Government of China has placed
strong emphasis on addressing problems related to
agriculture, farmers, and rural society, with the
development of a "new socialist countryside"
designated as a top priority for the Eleventh Five-Year Plan
(2006-2010). The financing of public services in rural
areas will be a key determinant of the Plan's success.
This report analyzes the performance of the

This paper tests the hypothesis that
enterprises may forgo formal finance in lieu of informal
credit by choice. They do so to avoid the additional
regulatory scrutiny and harassment that engaging with the
formal financial sector invites. We test this hypothesis
using enterprise-level data on 3,564 enterprises in 29
countries. In this sample, enterprises finance
approximately 57 percent of their working capital

The study provides policy
recommendations to increase the productivity of micro and
small firms in Bolivia and to provide incentives for firms
to formalize based on a fresh understanding of firms
behavior regarding formality, productivity, and
profitability. The study draws upon a new qualitative
analysis based on focus group interviews and a new
quantitative survey of 640 firms in six industries. The